CVR ENERGY, INC (CVI): what the price requires

At today's price, CVR ENERGY, INC (CVI) is priced for today's economics sustained for ~6.4 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-19 · Source: https://boothcheck.com/report/CVI

Headline

FieldValue
TickerCVI
CompanyCVR ENERGY, INC
Current price$33.74/sh

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed1.8%
Operating margin today1.8%
Margin expansion implied+0.0pp
Must persist for6.4y
Multiple paid35x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 8.9% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.9 years.

How unusual the bet is: elevated

ReferenceValue
vs own history-0.31σ
sustained it ~6.4 years at this level26%
implied end-window share0%

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset6.65x2expensive
Earnings2.84x3expensive
Relative0.38x3justifies
Growth1.11x3expensive

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.1%); the inversion above states its own rate.

Per-Model Detail (n=11)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$30.601.10xyesFCF base $0.2B, growth 2% (input: historical growth), terminal g 2.2%, WACC 7.1%, 5yr projection
DCF Exit MultipleGrowth$30.301.11xyesExit EV/EBITDA: 4.0x / 7.9x / 12.9x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$89.500.38xyesP/S fallback (negative EPS): Sector P/S 1.2x × TTM revenue — excluded from consensus
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$5.356.31xyesReference only (book value floor): BV/sh $5.35, ROE negative
Two-Stage Excess ReturnAsset$4.827.00xyesReference only (book value with convergence): BV/sh $5.35, ROE converges to ke
Discounted Future Market CapGrowth$21.791.55xyesRev $7.5B, growth 2% (input: historical growth; tapered), Terminal P/S: 0.3x / 0.5x / 0.5x (bear / base = today's held flat / bull, cap 6x)
Peter Lynch Fair ValueRelative$0.00—noNegative/zero EPS — earnings-based value floored at $0
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$38.140.88xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.48B × (1−21%) / WACC 7.1% → EPV (no growth)
Residual IncomeAsset——no—
Graham NumberAsset——no—
EV/EBITDA RelativeRelative$22.761.48xyesEBITDA $0.58B × sector EV/EBITDA 6.0x
FCF YieldEarnings$11.892.84xyesFCF $222.0M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$6.735.01xyesSBC-adj FCF $0.17B (FCF $0.22B − SBC $0.05B) capitalized at Kₑ
Ben Graham FormulaEarnings——no—
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative$89.500.38xyesRevenue $7.50B × sector P/S 1.2x
PEG Fair ValueRelative——no—
Earnings YieldEarnings——no—
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$1.3b
Net debt / NOPAT (after-tax)12.11x
Net debt / operating income (pre-tax)9.56x
Interest coverage0.8x
Share count CAGR (dilution)0.0%
Burning cashno

Bullet Takeaways

The price embeds about 24.5% annual operating growth for five years, but that solve runs off depressed trough earnings: trailing operating income is just $168 million for a company that earns multiples of that in a good refining year. The growth assumption is really a recovery assumption.

The valuation methods disagree sharply.

Q1 2026 was ugly: a $160 million net loss, a $204 million Renewable Fuel Standard liability, a $182 million derivative loss, and a dividend cut to $0.10. Net debt is about $1.27 billion against interest coverage of roughly 1x.

Bull Case

What traditional valuation models miss about CVR Energy is that they are anchored to a trough. The engine reads trailing operating income of about $168 million and a 2.2% operating margin, which makes the stock look like it requires 24.5% growth to justify the price. But refining earnings are violently cyclical, and Q1 2026 was a cyclical and regulatory low: a $160 million net loss driven by a $182 million commodity derivative loss and a $204 million Renewable Fuel Standard liability, not by the underlying refining business failing. The crack spread, the difference between crude cost and refined-product revenue that drives refiner profits, has actually strengthened sharply in CVR's Group 3 market. The problem in Q1 was margin capture, not the benchmark: elevated RIN costs absorbed much of the benefit of stronger cracks. When you normalize for the RIN and derivative hits, the earnings power is far above the trailing figure the models see.

There are two specific upside levers the static frames cannot price. First, the small refinery exemption. CVR's Wynnewood refinery has a pending 2025 SRE petition, and management estimates that a full exemption would have improved the Q1 2026 capture rate by about 12%. The EPA already affirmed Wynnewood's prior relief, granting 100% waivers for some years and 50% for others, so a favorable ruling on the open petition is a real, binary catalyst that would lift margins directly. Second, the geopolitical backdrop: management expects elevated crack spreads to persist as long as the current conflict continues, which supports a cleaner 2026.

The ownership and capital discipline round out the case. Icahn Enterprises, led by Carl Icahn, holds a majority stake, which means a controlling owner with a long record of pressing for value and a personal stake in the dividend. Management cut the dividend to $0.10 but explicitly framed it as temporary, expressing hope to raise it as conditions improve, and the company exited the loss-making Wynnewood renewable diesel unit, which had negative EBITDA, while exploring M&A in refining and fertilizer. The nitrogen-fertilizer segment provides a non-refining earnings stream that diversifies the commodity exposure. The bull case is that this is a cyclical and regulatory trough in a controlled, asset-rich refiner, where normalized earnings, an SRE ruling, and firmer cracks could lift the value toward the high end of the range near $26.

Bear Case

Frame the bear case around which methods say what, because the disagreement is the whole story, and the conservative ones are likely the more honest read. The relative-multiple and growth-DCF methods reach the $27.36 price (June 27, 2026), but they do so only by extrapolating a recovery: they require about 24.5% operating-profit growth for five years off a depressed base. That is an enormous spread, and the base sits at less than half the current price. When the only methods that justify the price are the ones assuming a sharp recovery, and the methods grounded in current earnings and assets say the stock is worth a fraction of the quote, the burden of proof sits entirely on the recovery happening on schedule.

The balance sheet makes the disagreement dangerous. Net debt is about $1.27 billion, and trailing interest coverage is roughly 1x, meaning current operating income barely covers interest. A refiner with thin coverage in a down cycle has very little margin for error: another weak quarter, a further RIN spike, or a refused SRE petition, and the company is funding its obligations from the balance sheet rather than from operations. The dividend cut to $0.10, down about 84% year over year, is management acknowledging that the cash is not there to sustain the prior payout. That is the action of a company conserving liquidity, not one confident in near-term recovery.

The regulatory and commodity exposure is structural and largely out of management's control. The filing is explicit that as a manufacturer of refined petroleum, renewable products, and nitrogen fertilizer, all commodities, the company is exposed to future market pricing (FY2025 10-K, accession 0001376139-26-000014), and it flags tariffs and bans on renewable feedstocks as sources of supply restriction and feedstock-price volatility (FY2025 10-K, accession 0001376139-26-000014). The RIN obligation that crushed Q1 capture is set by the EPA, and the SRE that would relieve it is at the agency's discretion, with the EPA having already missed a deadline on Wynnewood's petition. Analysts are appropriately cautious, a Moderate Sell consensus with an average target right around the current price. The bear case is that you are paying a recovery multiple for a thinly-covered, commodity-exposed refiner at a trough, where the honest methods point well below the price and the catalysts are at a regulator's mercy.

Valuation

Invert the price first. At $27.36 the market pays about 30x company-wide operating income, which solves to roughly 24.5% annual operating-profit growth over five years, computed at an 8.6% cost of capital with 4% terminal growth. The high implied growth is an artifact of the denominator: trailing operating income of just $168 million is a trough number for a refiner, so the price is really embedding a return to mid-cycle earnings rather than literal 24.5% compounding. The solve is rate-sensitive, with each one-point move in the cost of capital shifting the required growth by about 8.3 points, which is a wide swing.

The model families disagree as sharply as they can. Relative-multiple and growth-DCF methods reach the price, because they capitalize a recovery in cracks and volumes. The asset-based and earnings-power methods say the stock is expensive, because they capitalize the depressed current earnings and the book value of the refining assets.

The synthesis is that CVR Energy is a cyclical-trough bet, and the methods bracket the two outcomes. If cracks stay firm, RIN costs ease, and the Wynnewood SRE is granted, normalized earnings justify the high end near $26 and the price is reasonable. If the trough persists, the conservative methods near the $12 base, and the low end near $7, are the honest anchor, and the thin 1x interest coverage makes the downside more than a paper loss. Analyst targets cluster right around the current price near $28, with a Moderate Sell tilt, which captures the standoff: a refiner where the verdict turns on cycle timing and a regulatory ruling, not on the business compounding.

Catalysts

The defining recent event was Q1 2026 results reported April 30, 2026: net sales of $1.98 billion but a consolidated net loss of $160 million, or $1.91 per share. The drags were specific and partly non-cash or regulatory: a $182 million commodity derivative loss, a $204 million Renewable Fuel Standard liability, and weak margin capture, with elevated RIN prices cutting the capture rate by about 34% and adding $0.25 to $0.30 to every gallon. CVR cut its quarterly dividend to $0.10 and ceased operations at its loss-making Wynnewood renewable diesel unit. The pace of margin-capture recovery as cracks firm is the single operating signal that matters most.

The binary catalyst is the small refinery exemption. CVR's Wynnewood refinery has a pending 2025 SRE petition, and management estimates a full exemption would have improved the Q1 capture rate by about 12%; the EPA has already affirmed prior Wynnewood relief but has missed the deadline on the open petition, so a ruling in either direction is a direct margin catalyst. Other live items: management expects elevated crack spreads to persist while the geopolitical conflict continues, is exploring M&A in refining and fertilizer, and operates a nitrogen-fertilizer segment that diversifies earnings. Icahn Enterprises, led by Carl Icahn, holds a majority stake, so capital-allocation and any strategic moves run through a controlling owner. Analyst sentiment is cautious, a Moderate Sell consensus with targets averaging near $28 in a roughly $21 to $35 range. The next earnings report, the EPA's SRE decision, the path of RIN prices and crack spreads, and any move to restore the dividend are the events most likely to move the thesis.

Sources: CVR Energy Q1 2026 10-Q (StockTitan), CVR Energy Q1 2026 earnings highlights (Yahoo Finance), CVR Energy: margin capture weak, macro improving (Seeking Alpha), CVI analyst ratings (Benzinga).

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive CVI report on boothcheck